What Does A Financial Adviser Do?
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What does a Financial Adviser do?
What exactly does a financial adviser do?
A financial adviser assists clients and businesses to make informed decisions about how best to utilise their finances.
Here at Open Financial Advice, we do this by assessing your overall financial situation, your future goals and your tolerance to volatility which, in the financial advice world, is referred to as your Risk Profile. We do all this to create a unique and tailored strategy for each individual.
Effectively, we’re looking at supporting long-term capital growth success, factoring in the investment market here and overseas. Tax is a big player in financial advice, as well as changes to other aspects of UK policy and law. We’re here to assist clients to be ahead of any significant shifts that could otherwise be detrimental to their financial future.
What services does a financial adviser offer? Are pensions a big part of this?
They definitely are. People move jobs more regularly these days and often leave behind a pension pot. Since auto-enrolment came in, pension funds are generated for each employee, contributed to by them and by the company they work for. We bring all of those pots together and make sure everything works towards your goals for future retirement.
Income tax plays a big part with pensions, because it’s a primary way to reduce your tax bill. For both clients that are employed or self-employed, that can be a real driver, especially if you fall into the 60% tax trap, also known as the double tax trap, as we’ll perhaps touch on later.
For most clients, building that pension fund is fairly straightforward, but it becomes much more complex when we look at drawing funds out of the pension pot. It will depend on what’s happening in the financial markets, a client’s needs as they evolve over time, and making sure the pension income is stable.
For example, we may consider annuities, drawdown facilities or taking tax-free lump sums – or maybe a combination of all of those.
How can a financial adviser help with investments and savings?
We just talked about pensions, which are all about building for retirement and where the complexity comes at decumulation. With investments and savings, there are many more ‘wrappers’ available. Wrappers are essentially methods to ensure that capital is invested in the right way for a client and their needs.
Most people will be aware of Individual Savings Accounts (ISAs) and premium bonds, for example. But there are also onshore and offshore investment bonds, enterprise investment schemes and venture capital trusts. Sometimes clients prefer to have a discretionary managed portfolio.
It really depends on the client’s position and their drivers. We start by getting to the core of that, to allow us to tailor advice to that person.
Can you explain wealth management and what’s involved?
Wealth management is generally about tax. When building capital for the future, tax is one of the main things that can reduce what you generate. We want to make sure your wealth grows in a tax-efficient way, and can also be accessed tax-efficiently.
We’re not accountants, but we have a robust understanding of tax and UK tax changes. It’s not just income tax, either – it’s also capital gains tax and inheritance tax. Tax-efficiency and optimisation is key in ensuring that your investments and retirement planning deliver the desired results.
What else do we need to know about what you offer?
We offer everything in-house. It’s not just pensions, investments, retirement and capital growth. We also help with property financing and insurance, financial security and equity release.
We keep everything in one place and incentivise clients to stay with us. Often, clients prefer that, because it’s administratively easy. It’s not uncommon to have a set of meetings with clients where they ask lots of questions to understand what their options are. That’s available as well and is unique to us.
When should I see a financial adviser? Is there ever a wrong time?
Often people start to think about retirement a little too late. The longer you have to focus on what you’re aiming for, the better the outcome is going to be. You’re more likely to reach those targets over a longer timeframe.
If we’re looking at retirement in five years, it’s hard to change the outcome. If retirement is 25 years into the future, there’s a good chance we’ll meet or exceed your targets.
Clients often speak to a financial adviser because a life event has occurred. It could unfortunately be a bereavement or an inheritance. But it can also be receiving bonuses or paying a lot of tax.
You might want to understand what to do with a sum of money, or what to do about the tax liability. We often come on board for clients earning over £100,000 where they lose their personal allowance. For most people, £12,570 per year is tax-free, but you start to lose that once you earn over £100,000. People get more aware of their tax situation at that stage.
It’s different for everybody, but the earlier you set out what your goal may be, the more likely we can get those results.
Speak To An Expert
We’re here to advise you in a holistic way to help you meet your goals now and in the future.
What’s the process? What would happen if I called you today?
The first thing is to schedule a video call. We like you to be able to see us, and share our screen with you to talk you through information and the next steps. We gather information to understand you better and help us create a bespoke financial plan.
You’ll receive clear and actionable, tailored advice based on your specific needs and position. Next we give you the option to put it all into action and regularly review that. We are obligated to review at least once a year, and generally we catch up with clients twice a year, depending on their needs.
The aim is to make sure everything’s on track. It’s all quite informal at the beginning. It’s a conversation where we’ll explain exactly what we’ll be doing and how we can work towards your goals. We’ll confirm whether what you’re looking for is possible.
Does it cost for an initial conversation with you?
No, it’s completely free of charge. You’re able to schedule a meeting whenever you like. We do appointments all the way up to 9pm, which is unique. Most clients who are higher earners find that really useful, and people with young children find that evening appointments suit them too. It’s entirely free of charge.
We sometimes do get asked to review specific, complex areas. It could be business-related – perhaps you run a group of companies, or you’re facing a complex IHT liability, or you might be looking at Trusts. In that case, it can be an hourly charge – but that’s always agreed in advance or after the first meeting.
Why else is it important to seek financial advice?
We’re here to assist clients in making confident financial decisions for their future. We’re looking at avoiding unnecessary tax and fees. We’re looking at planning for retirement, generating consistent saving and investment returns.
Often it involves assisting in property purchases or any other financial needs, because we do everything in-house. We can help you protect your family, your business or both. Overall, we support our clients for the long-term – growing your wealth and passing financial sustainability to the next generation.
We really pride ourselves in getting to the core of what makes our clients tick. While arranging mortgages can be a little more transactional, that can form part of evolving financial situations – where we can really get involved.
For example, we can help with savings and making great returns on capital, but we also offer financial support through bereavement. It could be the death of parents or a partner, or perhaps there’s been a redundancy. Those life events can shape your future, so it’s important to get advice.
We’re here for the long-term. We’re not just great at offering a low fee structure. We want to be there for the long run with our clients, and we’re fortunate to already be demonstrating that in our reviews. It’s great, and we expect that to grow.
Often clients remember us more from the hard times they’ve had. Getting through those is usually more important to them than the actual figures, and it’s a privilege for us to help.
Key Takeaways:
- Financial advisers assess finances, goals, and risk profile to create a unique plan for long-term capital growth and navigating tax/policy changes.
- Advisers also consolidate pensions and use them to help reduce income tax, which is especially beneficial for higher earners.
- Selecting the right ‘wrappers’ (such as ISAs and investment bonds) is essential for a client’s specific investment needs.
- Open Financial Advice’s in-house service covers wealth growth and access in a tax-efficient way, including income, capital gains, and inheritance tax.
- It is best to seek advice early for better results. Open Financial Advice’s process starts with a free, informal conversation, leading to a long-term relationship with regular reviews.
The value of pensions & investments and any income from them can fall as well as rise. You may not get back the amount originally invested.